China stocks fell early Wednesday, led by blue-chips, as sentiment was soured by a media report alleging a probe of the head of the financial conglomerate Anbang Insurance Group, plus weak May investment data deepening worries of economic deceleration.

China stocks fell early Wednesday, led by blue-chips, as sentiment was soured by a media report alleging a probe of the head of the financial conglomerate Anbang Insurance Group, plus weak May investment data deepening worries of economic deceleration. Hong Kong shares also dropped, as investors braced for a likely U.S. rate hike later in the day, and awaited clarity on the Federal Reserve’s future policy. Some investors also think a U.S. hike will prompt China to increase its interest rates.

China’s blue-chip CSI300 index fell 1 percent, to 3,545.44 points by the lunch break, while the Shanghai Composite Index lost 0.6 percent, to 3,135.32 points. Investors dumped stocks – many big-caps – that are partly-owned by Anbang, after the acquisitive company said late on Tuesday its chairman Wu Xiaohui was no longer able to fulfil his duties. Hours earlier, Chinese magazine Caijing reported that Wu had been taken away for investigation.

“Given the recent data, we are almost certain to see a continued slowdown in 2H17 and 2018,” wrote Larry Hu, analyst at Macquarie Capital Ltd. “Reflation has become disinflation. Inventory stocking has turned into destocking. Property is entering a downcycle.”

In Hong Kong, the Hang Seng index dropped 0.3 percent, to 25,786.00 points, while the Hong Kong China Enterprises Index lost 0.3 percent, to 10,496.66. All eyes were on the U.S. central bank, which is scheduled to release its rate decision at 1800 GMT Wednesday with a news conference to follow from Chair Janet Yellen.